120 ITD 301 Per I.P. Bansal, Judicial Member. : These appeals filed by assessee are directed against consolidated order of ld. CIT(A) dated 21-9-2006 in respect of assessment years 2003-04 & 2004-05. Grounds of appeal of ITA No. 3480 "1. That ld. CIT(A) has erred both on facts and in law in up- holding assessment framed on assessee under section 153A of Income-tax Act. H e has failed to appreciate that in instant case, neither any search was initiated against assessee under section 132(1) of Income-tax Act, nor any books of account, other documents or any other asset were requisitioned under section 132A of Income-tax Act (in case of assessee- company), hence, assessment made under section 153A of Income-tax Act could not have been held to have been validly made by ld. Assessing Officer by invoking provisions of section 153A of Income-tax Act. 2. That without prejudice, ld. CIT(A) has further erred in failing to appreciate that, ld. Assessing Officer had grossly erred in making addition of Rs. 2,62,68,654 which addition had been made without any valid material or basis. In fact, ld. CIT(A) has completely overlooked that there was heavy burden on revenue to establish, there was under-statement of amount alleged to be income, which burden had not been discharged and as such ld. CIT(A) erred in sustaining addition of Rs. 2,62,68,654. 3. That ld. CIT(A) has failed to appreciate that ld. Assessing Officer had erred in making addition arbitrarily of Rs. 2,62,68,654 and that too without rebutting material evidence furnished by assessee to establish that neither there was any understatement of income nor purported evidence pertained to assessee s transactions (on basis whereof addition was made by ld. Assessing Officer). 4. That ld. CIT(A) has failed to appreciate that addition had been purportedly made on basis of documents purportedly seized from residence of Shri Sandeep Bansal, in whose case search had allegedly been initiated under section 132(1) of Income-tax Act, and as such no adverse inference could have been drawn against assessee without establishing that any further income had either accrued to assessee or was received by it. In absence of any valid evidence to support such finding, ld. CIT(A) went into error in sustaining addition made by ld. Assessing Officer. 5. That ld. CIT(A) has failed to appreciate that addition had been made by ld. Assessing Officer on basis of unsubstantiated allegations that assessee had under invoiced sale value of supplies which allegation was not only refuted by assessee but was also shown to be false and had been planted by disgruntled employee. CIT(A) has failed to appreciate that there was no valid evidence to support that there was any under- invoicing made by assessee. ld. CIT(A) has failed to appreciate that all supplies made by it were to verifiable existing parties and there was no evidence on basis whereof it could even be validly suspected supplies made were under-invoiced. 6. That ld. CIT(A) has completely overlooked evidence furnished by assessee in course of assessment proceedings and relied on by assessee in course of appellate proceed- ings. There was no valid justification to have brushed aside all such evidence and that too without discharging even, initial burden which admittedly was on revenue, to establish there was any under-invoicing made by assessee. 7. ld. CIT(A) has failed to appreciate that ld. Assessing Officer having accepted books of account which showed that sale price of stocks supplied were duly recorded which were comparable to sale value of stocks, sold in broken period during financial year. He has failed to comprehend that how could it be accepted that, only for part of broken period, there could be such substantial difference in sale value, so as to support allegation of under-invoicing of stocks. 8. That ld. CIT(A) in sustaining addition of such huge amount has failed to appreciate and overlooked that, assessee had furnished necessary evidence to establish selling rates (at Jodhpur by different manufacturers of similar material) compared favourably with sale rates, on which supplies were made by assessee at Jodhpur and were duly recorded in books of account and that similarly in respect of similar supplies made in preceding years also compared favourably with sales rates of other manufacturers. 9. findings of ld. CIT(A) that, it is undisputed fact that search was carried out on 17-9-2003 at Branch Office of assessee at Jodhpur is based on misconceived facts. aforesaid alleged fact is disputed fact. 10. That further findings that during course of search, it was found that substantial payments in cash was received for under billing and payments in cash were received at Jodhpur and Mumbai and further cash from parties on account of under-billing was collected at Jodhpur and by Shri Jhala Ram at Mumbai over and above billing amount, is also erroneous and is in disregard of voluminous evidence furnished by assessee to support such allegations are entirely erroneous. There was no evidence which had been brought on record by ld. Assessing Officer, that assessee had received any such sums as alleged and represented under invoiced sale value. In fact there was no evidence as to who paid alleged sum which had alleged to have been received. 11. That ld. CIT(A) has grossly erred in placing entire reliance in support of addition made on statement of Shri Sandeep Bansal, who was disgruntled employee. ld. CIT(A) has completely overlooked that assessee had not been confronted with statement of Shri Sandeep Bansal nor was he produced for assessee s cross-examination. In view thereof there was absolutely no justification on part of ld. CIT(A) to have sustained addition which was based on inadmissible evidence. In fact, assessee had lead evidence to establish that statement made by Shri Sandeep Bansal was based on concocted and made belief self-serving evidence. 12. That ld. CIT(A) has failed to appreciate that there was no valid basis for concluding that entries in books of account had any connection or nexus with alleged cash collection by Shri Sandeep Bansal. findings "that Assessing Officer after verification of seized material vis- -vis entries in books of account had explained in order to prove entries of cash collection in seized documents were genuine" is misconceived. In fact this could have alone been so done only after establishing that customers had made any such alleged payments and not on basis of purported documents allegedly found and seized, which had been fabricated by disgruntled employee. basis of allegation that it has been established entries were genuine is itself misconceived. 13. That findings of ld. CIT(A), statement of Shri Sandeep Bansal during course of search under section 132(4) of Income-tax Act was binding on assessee, is contrary to well-settled legal position. It is well- settled that before any adverse inference is drawn on basis of any statement, same has to be confronted to person against whom said evidence/statement is to be used. 14. That finding of ld. CIT(A) that it was burden of assessee to have produced Shri Sandeep Bansal is also based on assumption burden lay upon assessee to establish non- existing facts which are unsupported by any valid evidence. That in any case and without prejudice, when such evidence was produced, same was brushed aside. 15. That ld. CIT(A) has further erred in concluding that comparability of quoting of rates with other parties is not acceptable, because in present case quality may be better and popularity of brand name may be different. In recording aforesaid findings ld. CIT(A) has ignored that there is no basis for such allegation. In fact, assessee had duly established neither quality was better nor popularly warranting assumption of CIT(A). In fact, evidence had been brought on record to establish that popularity and quality had no such similarity. ld. CIT(A) has thus, erred in sustaining addition of Rs. 2,62,68,654. 16. That ld. CIT(A) has further erred in sustaining disallowance of Rs. 69,438 for unpaid CST." ITA No. 3481 In ITA No. 3481 only one issue is raised in 15 grounds i.e., regarding validity or otherwise of search proceedings as well as addition on account of under-billing of invoices. grounds raised are identical to ground Nos. 1- 15 of ITA No. 3480/D/06 except different in figures which for assessment year 2004-05 is Rs. 11,59,78,180. For sake of brevity ground in ITA No. 3481/D/06 are not reproduced. 2. Two warrant of authorizations under section 132 of Income-tax Act, 1961 ( Act ) were issued in Form No. 45 by Director General of Income-tax (Investigation), Jaipur in name of Shri Sandeep Bansal which are dated 28-8- 2003 and 11-9-2003. It may be mentioned here that copy of these warrant of authorizations was furnished before us by ld. DR to support his argument that search has validly been carried out in case of assessee. relevant columns where name of person in whose name warrant of authorization is issued and place which has been authorized to be searched are reproduced below: "Warrant of Authorisation at residence of Sh. Sandeep Bansal If summons under sub-section (1) of section 37 of Indian Income-tax Act, 1922, or under sub-section (1) of section 131 of Income-tax Act, 1961, or notice under sub-section (4) of section 22 of Indian Income-tax Act, 1922, or under sub-section (1) of section 142 of Income-tax Act, 1961, is issued to Shri Sandeep Bansal [name of person] to produce, or cause to be produced, books of account or other documents which will be useful for, or relevant to, proceedings under Indian Income-tax Act, 1922, or under Income-tax Act, 1961, he would not produce, or cause to be produced, such books of account or other documents as required by such summons or notice: Sarvashri/Shri/Shrimati Shri Sandeep Bansal are/is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for purposes of Indian Income-tax Act, 1922, or Income-tax Act, 1961: And whereas I have reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing have been kept and are to be found in Sector A, Shastri Nagar, Nr. Mahaveer Mandir, Jodhpur......................... (specify particulars of building/place/vessel/vehicle/aircraft): This is to authorise and require you as overleaf...........................[name of Deputy Director or of Deputy Commissioner or of Assistant Director or of Assistant Commissioner or Income-tax Officer]- Second Warrant of Authorisation If summons under sub-section (1) of section 37 of Indian Income-tax Act, 1922 or under sub-section (1) of section 131 of Income-tax Act, 1961, or notice under sub-section (4) of section 22 of Indian Income-tax Act, 1922, or under sub-section (1) of section 142 of Income-tax Act, 1961, is issued to Shri Sandeep Bansal [name of person] to produce, or cause to be produced, books of account or other documents which will be useful for, or relevant to, proceedings under Indian Income-tax Act, 1922, or under Income-tax Act, 1961, he would not produce, or cause to be produced, such books of account or other documents as required by such summons or notice: Sarvashri/Shri/Shrimati Shri Sandeep Bansal are/is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for purposes of Indian Income-tax Act, 1922, or Income-tax Act, 1961: And whereas I have reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing have been kept and are to be found in Depot, Jindal Strips Ltd., C-62 MIS II Phase, Basni, Jodhpur...........................(specify particulars of building/place/vessel/vehicle/aircraft): This is to authorise and require you as overleaf [name of Deputy Director or of Deputy Commissioner or of Assistant Director or of Assistant Commissioner or of Income-tax Officer]". [Entries made in warrants are emphasized] 3. Said Shri Sandeep Bansal at time of issuing of warrant was employee of assessee looking after Jodhpur branch. Search was conducted on 17-9-2003. It has been recorded in assessment order that incriminating documents which relate to assessee were found from residence of said Shri Sandeep Bansal. statement of said Shri Sandeep Bansal was recorded in which it was explained that he was working as branch manager of assessee-company since 1-1-2003 and his salary from assessee-company is around Rs. 15,000 per month and company has provided him with Maruti car and one rent free house at Jodhpur. He was looking after supply of SS flats by company according to local supply orders from re-rolling mills at Jodhpur. As per assessment order, he stated that sales bills were issued by employees of company as per his instructions. He also explained entire system of cash collection on account of under billing on sale of SS flats to all re-rolling mills at Jodhpur. He also stated that in addition to receipts of payment in cheques against sale proceeds, payment in cash for under-billing is also received. Payments in cheques were received in Jodhpur and Mumbai and cash from parties on account of under-billing was collected by him at Jodhpur and by Shri Jhala Ram at Mumbai who was former agent of company. It is on basis of that statement of Shri Sandeep Bansal notice was issued to assessee under provisions of section 153A of Income-tax Act, 1961 on 4- 2-2005 in response to which return of income was filed at same income which was originally filed i.e., at income of Rs. 20,06,83,700. Assessing Officer issued questionnaire to assessee to explain as to why excess amount received on account of under-billing as stated by said Shri Sandeep Bansal should not be treated as income of assessee. Assessing Officer has reproduced certain parts of statement of said Shri Sandeep Bansal in assessment order. In response it was submitted vide letter dated 22-12-2005 that panchnama was prepared in case of Shri Sandeep Bansal which clearly states that it is warrant in case of Shri Sandeep Bansal and it is only in column B it was stated that warrant is to search premises of M/s. Jindal Strips Ltd. Thus it was submitted that since warrant was admittedly issued in case of Shri Sandeep Bansal, it cannot be stated that search was initiated under section 132(1) of Income-tax Act in case of assessee- company. It was submitted that provisions of section 153A could be invoked in case of person where search is initiated under section 132, or books of account or other documents or any assets are requisitioned under section 132A after 31-5-2003. It was submitted that search was initiated against Sandeep Bansal and no search was initiated against assessee. It was also submitted that registered office of assessee which is situated at Delhi Road, Hissar would have been searched and warrant would have been issued by concerned authority having jurisdiction over assessee. Whereas warrant is issued in case of Shri Sandeep Bansal under section 132 by Director General, Income-tax (Investigation), Jaipur. It was submitted that proceedings initiated under section 153A are without jurisdiction and notice issued for assessment years 1998-99 to 2001-02 were untenable. It was further requested that statement of Shri Sandeep Bansal has been extracted in notice issued to assessee and from notice it is apparent that adverse inference is intended to be drawn on basis of that statement, therefore, he may be produced for cross examination as said statement has been recorded behind back of assessee-company and assessee-company vehemently dispute allegation of any under-billing on its part and statement of said Shri Sandeep Bansal was totally false and incorrect. 4. In response to above-mentioned reply of assessee, Assessing Officer vide letter dated 12-1-2006 informed assessee that as second warrant was in name of assessee s branch therefore, search was validly initiated against assessee and these warrants were duly served on said Shri Sandeep Bansal. Copies of panchnama were given to assessee. Assessing Officer also supplied photo copies of all documents seized from residence of said Shri Sandeep Bansal. Assessing Officer found that expenditure on account of rent, house rent, TDS and other day-to-day expenditure written by said Shri Sandeep Bansal in his own handwriting in note book were tallying with regular books of account whereas in same note book other entries regarding cash collection in names of different persons were not accepted. Thus Assessing Officer pointed out that assessee has been accepting some part of note book and denying other part of note book. It was submitted vide reply dated 18-2- 2006 that Annexures A-1 to A-11 which were admittedly seized from residence of said Shri Sandeep Bansal when search was conducted in his case and assessee-company has no connection whatsoever with those documents and since those documents neither belonged to assessee nor have been seized from office premises of assessee, therefore, no adverse inference could be drawn against assessee on basis of such documents. Assessee also submitted affidavit of said Shri Sandeep Bansal which is dated 5- 11-2003 wherein said Shri Sandeep Bansal had submitted that alleged statement on basis of which adverse inference is sought to be drawn against assessee, was totally untrue and had been made by him in scheme of things planned by him to cause financial loss and damage to company. Assessing Officer issued summon to said Shri Sandeep Bansal for appearance o n 21-2-2006 on which date said Shri Sandeep Bansal did not appear but requested for week time on ground that he was not feeling well. As no medical certificate was enclosed with said letter, Assessing Officer inferred t h t said Shri Sandeep Bansal does not want to appear before him for verification of affidavit submitted by him to company which has been rejected by Assessing Officer on ground that same is after- thought. Assessing Officer rejected affidavit also on following grounds: 1.The statement given at time of search was recorded under section 132(4)/131 of Act was on oath and was given voluntarily without any pressure and in full senses. 2.From seized documents and files found from residence of said Shri Sandeep Bansal, it is evident that all entries have been made in handwriting of said Shri Sandeep Bansal and thereafter month-wise cash collection is summarized in computer sheet. 3.Said Shri Sandeep Bansal has not only maintained above record but h e has also maintained record of expenditure incurred by him on account of office rent, house rent, TDS or any other expenditure in summarized sheet from January to September. 4.The account maintained by Branch Manager of assessee is perfect record of cash collection and payment thereof which is maintained in systematic way and it was admitted by said Shri Bansal unconditionally and unambiguously complete modus operandi of cash collection in his statement. 5.A search was also carried out at Chopra group of cases at Jodhpur on 17-9-2003 and said Shri Sandeep Bansal vide his answer to question No. 16 had admitted that sum of Rs. 1,22,00,000 was received by company on account of under-billing from Chopra group from February 2003 to 15-9-2003 on account of sale of SS flats to Chopra group of cases. 6.During search at residence of Rawal Chand Chopra, one of partners in Chopra group, clinching evidence was found as per page 4 of Annexure-A and in appraisal report of Chopra group of cases some facts were mentioned and relevant portion of appraisal report have been reproduced by Assessing Officer at pages 14 and 15 of assessment order. 7.Referring to Annexure A-2 seized from residence of Shri Sandeep Bansal, Assessing Officer observed that it is ledger maintained on account of under billing amount received from different parts of Jodhpur during month of February and March, 2003 and total of these are sum of Rs. 2,58,41,760 which was collected by said Shri Sandeep Bansal and such figure more or less tallies with under-billing payment received during month of February and March and thus it is corroborative evidence which goes to prove that assessee- company was receiving under-billing amount from said Shri Sandeep Bansal and same constituted concealed income of assessee. 8.Assessee was duty bound to produce said Shri Sandeep Bansal for examination and it was not done. Thus assessee has failed to produce its witness and department has discharged its burden as statement of said Shri Sandeep Bansal was recorded at time of search in which all facts were categorically admitted. Therefore, Assessing Officer observed that plea o f assessee that opportunity has not been given to cross-examine witness is not acceptable as witness is employee of assessee. 5. On basis of these observations Assessing Officer concluded that assessee has been collecting cash from re-rolling mills at Jodhpur on rates decided by Head Office which were collected through said Shri Sandeep Bansal at Jodhpur. amount of Rs. 2,62,68,654 and Rs. 11,59,78,180 for assessment years 2003-04 and 2004-05 respectively were amounts received by assessee on account of under-billing on sales of SS flats and since all expenditure was debited in books of account entire receipt on account of under-billing was concealed income of assessee. It is in this manner Assessing Officer made addition. 6. Before CIT(A) main issue raised by assessee to contest assessment framed and addition were as under: (i)Whether Assessing Officer was justified in initiating proceedings under section 153A of Income-tax Act; and (ii)Whether Assessing Officer was justified in making addition on account of underpricing in sales shown in books of account. 7. With regard to issue that whether Assessing Officer was justified in initiating proceedings under section 153A it has been observed by CIT(A) that Shri A.P. Garg, Sr. Vice President at Company Secretary (AR of assessee- company) has preferred not to make any submission. Taking into account such fact and also taking into account that there is specific mentioned of search action in assessment order itself which is at branch office at assessee-company, and relying on findings recorded in para 7 of assessment order, ld. CIT(A) has held that proceedings under section 153A w e r e validly initiated for both assessment years and thus, validity of assessment under section 153A was upheld by ld. CIT(A). 8. With regard to merits of addition, it was argued by AR of assessee-company that there was no material brought on record to support allegation that assessee had made supplies by under-invoicing supplies made for period from February, 2003 to March, 2003 and from April, 2003 to 16-9-2003. With regard to statement of Shri Sandeep Bansal recorded on 17-9-2003, it was submitted that said statement was recorded at back of assessee and no opportunity whatsoever was allowed to assessee to cross-examine said Shri Sandeep Bansal. Said Shri Sandeep Bansal on enquiries and questioning made by assessee about contents of his alleged statement, has submitted affidavit dated 5-11-2003 [a copy was submitted to ld. CIT(A)] in which it was admitted by said Shri Sandeep Bansal that he had been planning to use fabricated records against assessee-company. Thus, it was pleaded that no adverse influence can be drawn on basis of statement of said Shri Sandeep Bansal which was recorded during course of search proceedings against him. It was again submitted that Sandeep Bansal should be produced before assessee for cross-examination in order to enable assessee to rebut purported statement which was admittedly made by him to cause financial loss to assessee-company on basis of fabricated material. It was further submitted that letter was filed before Assessing Officer on 25-2-2006 wherein chart of selling rate at Jodhpur by different manufacturer of material was furnished and it was submitted that selling price of assessee-company shown in books of account were duly comparable with selling price of other manufacturers who were selling their products in market. 9. Considering these submissions ld. CIT(A) has observed that it is undisputed fact that search was carried out at Branch Office at assessee-company at Jodhpur on 17-9-2003 and also at residence of assessee-company s Branch Manager at Jodhpur namely Shri Sandeep Bansal. During course of such search, specific clear and meticulously maintained documents/papers were found wherein proper account of cash collection at Jodhpur was maintained by Shri Bansal at Jodhpur and by Shri Jhala Ram at Bombay which was over and above billing amount of S.S. Flats. statement under section 132(4) of said Shri Bansal was recorded in which seized material was confronted to him and said Shri Sandeep Bansal has given clear and unambiguous statement confirming month-wise cash collection of material sold by assessee-company and recording cash collection on behalf of assessee-company. Modus operandi of cash collection at different places and final destination of said unaccounted cash collection was explained in statement. As per para 9 of assessment order, assessee was confronted with photocopy of seized document found from office premises as well as from residence of Branch Manager which were made available to assessee. Assessing Officer has explained in assessment order after verification of seized material vis-a-vis entries in books of account that entries of cash collection in those seized documents were genuine and it was actual state of affairs and cash collection was not recorded in books of account. veracity and correctness of entries regarding cash collection is established by fact that notings and details of other expenditure exactly tallied with books of account maintained by assessee-company. With regard to contents of affidavit and its genuineness and truthfulness, ld. CIT(A) observed that affidavit is dated 5-11-2003 and why it was not furnished by Shri Bansal himself to departmental authorities and why it was not submitted by assessee on said date itself. According to ld. CIT(A) statement given by said Shri Bansal under section 132(4) was binding statement on assessee-company as said Shri Sandeep Bansal at relevant time was Branch Manager of assessee-company. According to ld. CIT (A) onus was on assessee-company to discharge by producing Shri Sandeep Bansal before Assessing Officer particularly when summon under section 131 was issued. With regard to comparability of rates with other parties, ld. CIT(A) observed that same is not acceptable as quality in case of assessee may be better and also because of popularity of brand of assessee-company. Ld. CIT(A) further observed that rate chart is not supported with prevailing price evidence by assessee and other suppliers. He observed that there is emphatic evidence of cash collection over and above bill amount. Keeping in view all these facts ld. CIT(A) has upheld addition. assessee is aggrieved, hence, in appeal. 10. Ld. AR after narrating facts arguing on issue of validity or otherwise of search assessment pleaded that search assessments suffer from legal infirmities as no search operation has been carried out in case of assessee-company. Therefore, he pleaded that assumption of jurisdiction by Assessing Officer under section 153A is illegal and invalid. Before Assessing Officer as well as CIT(A) it has been repeatedly argued that there being no search carried out on assessee, search assessment is invalid but both of them have brushed aside such submission of assessee. It was further argued that impugned addition on account of alleged under-billing of sale of stainless steel flats (S.S. Flats) by Jodhpur Branch office have been made solely on basis of statement of Shri Sandeep Bansal who is disgruntled employee and whose statement was recorded behind back of assessee. 11. Elaborating his arguments, it was pleaded by ld. AR that assessments made by Assessing Officer under section 153A on basis of documents seized from residential premises of disgruntled employee without allowing opportunity of cross-examination are void ab initio and are liable to be cancelled. He pleaded that in process of framing assessment, department has deliberately ignored most relevant evidence in shape of seized books of account which were found at business premises of company and also statements of various employees namely Shri Jhala Ram, Shri Shanti Saxena and Shri Vikram Jindal etc. recorded by DDI Investigation which unequivocally falsify allegation of under-billing against assessee. It was contended that search conducted on 17-9-2003 under section 132A was in case of Shri Sandeep Bansal who was Branch Manager of assessee-company at Jodhpur Branch. In pursuance of search warrants two premises namely residence of Shri Sandeep Bansal i.e., A-38, Shastri Nagar, Jodhpur and Branch Office premises i.e., C-62, MIA, Phase-II, Basni, Jodhpur were searched. Punchnamas were drawn for both premises, which are placed at pages 1-17 of paper book, indicate that premises were searched in pursuance of warrants issued in name of Shri Sandeep Bansal. No warrant of authorization has been issued against assessee which authorize search operation at any of its business premises including Head Office at Hissar or any of Branches including Jodhpur Branch. In absence of such warrant of authorization against assessee-company, provisions of section 153A could not be invoked against assessee-company. authorization issued in name of Shri Sandeep Bansal does not tantamount to authorization in case of assessee-company merely because Shri Sandeep Bansal is working as Branch Manager and premises to be searched in his case are mentioned as business premises of Branch Office of assessee. It was pleaded that on this ground itself impugned assessment orders are liable to be quashed. It was contended that all these facts are clear and undisputable to support contention that assessment is liable to be quashed on this ground, reliance was placed on decision in case of Nenmal Shankarlal Parmer v. Asstt. CIT (Investigation) [1992] 195 ITR 582 (Kar.), CIT v. Tirupati Oil Corpn. [2001] 248 ITR 194 (Bom.), Rudrachar v. DIT [2002] 257 ITR 549 (Kar.) and Smt. Sita Devi v. CIT [1980] 122 ITR 105 (Punj. & Har.). 12. It was further submitted that no incriminating evidence or material has been found at business premises of Branch Office. It was pointed out that documents which have been found and inventorised from business premises of assessee are Annexure-A (Serial No. 1) from pages 1-40 & 1- 383 and Annexure-A (Serial No. 2) pages 1-320. 13. It was pointed out that documents at Annexure-A (Serial No. 1) are computerized sheets which are statement of accounts duly entered in books o f account of assessee-company maintained in regular course of business and all these transactions are found recorded in seized material are duly recorded in regular books of account and are audited accounts on basis of which return of income has been filed in regular manner. Document at Annexure-A (Serial No. 2) are copy of sale bills etc. found during search operations and have been duly accounted for in books of account of Branch Office. Thus, it was pointed out and submitted that no incriminating material/evidence was found at business premises of assessee at Jodhpur. 14. Referring to facts relating to search of residential premises of said Shri Sandeep Bansal, it was submitted by ld. AR that search operation commenced at 7.40 a.m. and statement of Shri Sandeep Bansal was recorded 1 0 minutes later at 7:50 a.m. Thus, it was pleaded that it is quite intriguing to note that within 10 minutes time, authorized office had called witnesses, carried out search of residential premises of Shri Sandeep Bansal and prepared annexures of seized documents and paper. To support, reference was made to search papers and statement of Shri Sandeep Bansal in which reference has been made to documents listed in Annexure- A1. It was submitted that it is quite significant to note that in very initial stage of his statement, Shri Sandeep Bansal has happily volunteered story to Authorised Officer that he has been receiving cash payments on under billing of sale of S.S. Flats at Jodhpur. In answer to question No. 2 said Shri Sandeep Bansal without any query from Authorized Officer, himself at his own answered regarding under billing or receipt of on money on sales made at Jodhpur Branch which is unusual conduct of employee. He pleaded that from these facts, it is clear that sinister intention of said Shri Sandeep Bansal was to cause harm to its employer company by preparing fabricated records of Branch Office and hand over same with indecent hurry to Authorized Officer and immediately thereafter in unholy haste made statement regarding under-billing without any such query put to him by Authorized Officer. 15. Further referring to witnesses to panchnama it was pleaded that both of witnesses namely Chitra Mathur and her Father-in-law Shri P.C. Mathur were residents of same house and are not independent witnesses. Thus, it was pleaded by ld. AR that entire search action at residence of said Shri Sandeep Bansal is mere facade and said Shri Sandeep Bansal is in fact king pin of entire conspiracy engineered against assessee. 16. With regard to statement of Shri Sandeep Bansal recorded on date o f search at his residence, ld. AR referred to explanation of assessee furnished vide letter dated 15-2-2006 (pages 99-104) of paper book. In said letter it was submitted that statement of said Shri Sandeep Bansal was recorded at back of assessee and no opportunity was ever allowed to assessee to cross-examine said Shri Sandeep Bansal. assessee has conducted enquiries from Shri Sandeep Bansal about contents of his statement and he has furnished to assessee-company affidavit dated 5- 11-2003, copy of which was submitted to Assessing Officer (affidavit at pages 103-104 of paper book). It was submitted that it is evident from affidavit that what was stated in statement recorded at time of search was totally untrue and statement was made in scheme of things planned by him to cause financial loss or damage to assessee-company. It was also admitted by him that he had been planning to use fabricated records against company. Referring to submissions it was submitted that no adverse influence should be drawn against assessee-company on basis of statement recorded during search proceedings. It was further submitted in said letter that said Shri Sandeep Bansal may be produced for cross- examination in order to enable assessee to rebut purported statement examination in order to enable assessee to rebut purported statement which admittedly has been made by him to cause financial loss to assessee- company on basis of fabricated material. said affidavit was submitted by said Shri Sandeep Bansal during course of in-house enquiry conducted by assessee-company and copy of affidavit was also given to Assessing Officer along with above mentioned letter. Though Assessing Officer had issued summon to said Shri Sandeep Bansal for appearance on 21-2-2006 but letter was filed by witness to seek adjournment for week on ground that he was unwell. It was not justified that Assessing Officer has proceeded to frame assessment without enforcing attendance of witness for cross-examination demanded by assessee simply on basis that affidavit filed by assessee is after-thought. Ld. CIT(A) also has upheld validity of action of Assessing Officer solely on basis that onus was on assessee to produce said Shri Sandeep Bansal particularly when Assessing Officer had issued summon to said witness. It was pleaded that such conclusions and findings reached by CIT(A) are contrary to well established principles of common law prudence as well as facts and circumstances of case. It was submitted that it is incorrect to say that affidavit is after- thought. affidavit was furnished by said Shri Sandeep Bansal to assessee-company during course of enquiry conducted by assessee- company. When revenue confronted assessee with statement of said Shri Sandeep Bansal, assessee duly enclosed affidavit of employee vide letter dated 25-11-2005. department initiated action under section 153A after more than 2 years of recording above statement and obviously there was no occasion earlier for assessee-company to insist on explaining its position without any notice thereof by department. Thus, he pleaded that it is incorrect to say that affidavit is after-thought. 17. So as it relates to findings of ld. CIT(A) that statement of said Shri Sandeep Bansal which was recorded under section 132(4) is binding on assessee-company, ld. AR argued that same is factually and legally wrong. It was submitted that statement may be relevant and admissible in his individual case but same is not binding on assessee-company. If said statement is to be used against assessee then it is imperative on department to give opportunity to assessee for cross-examination. To support such contention reliance was placed on decision in case of Kalra Glue Factory v. Sales Tax Tribunal [1987] 167 ITR 498 (SC), Kishinchand Chellaram v. CIT [1980] 125 ITR 713 (SC) and CIT v. SMC Share Brokers Ltd. [2007] 288 ITR 345 (Delhi). 18. It was further submitted that CIT(A) was wrong in holding that onus was on assessee to produce said Shri Sandeep Bansal and said stand of revenue is contrary to following decisions: 1.Munnalal Murlidhar v. CIT [1971] 79 ITR 540 (All.). 2.Addl. CIT v. Radhey Shyam Jagdish Prasad [1979] 117 ITR 186 (All.). 3.Food Corpn. of India v. Provident Fund Commissioner [1990] 1 SCC 68. 4.Nathuram Weljibhai Vyas v. Mrs. Laxmibai Lunkaranji Chandak [1983] 139 ITR 948 (Bom.). 19. It was further pleaded that according to principle of natural justice if any evidence is used against person he should be confronted with it and must be given opportunity to controvert it. Reference was made to decision of Hon ble Supreme Court in case of Union of India v. T.R. Verma [1958] SCR 499 (507) wherein it has been observed by their lordships that rules of natural justice require that party should have opportunity of adducing all relevant evidence on which he relies, that evidence of opponent should be taken in his presence, and that he should be given opportunity of cross-examining witnesses examined by that party, and that no material should be relied on against him when he has not been given opportunity of explaining them. 20. Reference was also made to decision of Hon ble Supreme Court in case of C. Vasantlal & Co. v. CIT [1962] 45 ITR 206 in which it has been held that Income-tax Officer is not bound by any technical rules of material to facilitate assessment even by private enquiry but if he desires to use material so collected, assessee must be given adequate opportunity of explaining it. Reference was also made to decision of Hon ble Supreme Court in case of Kalra Glue Factory (supra) in which it has been held that statement which was not tested by cross-examination is not good evidence. statement which was not tested by cross-examination is not good evidence. Decision of Calcutta High Court in case of CIT v. Eastern Commercial Enterprises [1994] 210 ITR 103 was referred to contend that if Assessing Officer realize on testimony of witness, assessee should be offered opportunity to cross-examine and such right of cross-examination is indispensable right of assessee and such opportunity is one of corner stones of natural justice. department cannot cut short process of taking oral evidence by merely having examination-in-chief. It is necessary requirement of process and taking evidence that examination-in-chief is followed by cross-examination and re-examination, if necessary. Without truth being tested, no oral evidence can be admissible evidence and could not form basis of any inference against adverse party. Similar view has been expressed in decision of Bombay High Court in case of Vasanji Ghela & Co. v. CST 40 STC 544. Reference was also made to decision of Bangalore Bench in case of Kirloskar Investment & Finance Ltd. v. Asstt. CIT [1998] 67 ITD 504 for raising similar proposition. 21. Referring to all these decisions it was vehemently pleaded that despite repeated request made on behalf of assessee-company during assessment proceedings, opportunity of cross-examining Shri Sandeep Bansal has been denied in gross violation of well accepted principles of natural justice and thus, statement of said Shri Sandeep Bansal recorded on 17-9-2003 cannot be used against assessee. 22. Arguing further ld. AR pleaded that it has been clearly stated in affidavit filed by said Shri Sandeep Bansal that seized records are false and have been fabricated by him to cause financial harm to assessee-company. He pleaded that said Shri Sandeep Bansal bore serious grudge against assessee-company for being denied increase in his remuneration and proceeded to fabricate records to harm company. He pleaded that it is noteworthy that these records have been seized from residence of disgruntled employee during search operation which were apparently stage managed at instance and instigation of employees himself. unseemly haste with which records were passed on to search party by said Shri Sandeep Bansal and inventorized and recording of his statement being within 10 minutes of commencement of search depict very unusual and intriguing picture. false story of under billing was spun out by said Shri Bansal before authorized officer in impatient hurry in very beginning of statement before any specific question be put to him. Such fabricated documents cannot be sole foundation for building case of over billing and on money against assessee. Reliance was placed on decision of ITAT in case of Asstt. CIT v. Dalamal & Sons Invested Co. [1993] 46 TTJ (Bom.) 143 to contend that note-book written by disgruntled employee found at business premises of assessee cannot be basis for proving charging of on money in real estate business. It was pleaded that facts of present case are on much ker ground in favour of assessee as documents on basis of which addition is made were found from residence of employee and not from business premises of assessee. 23. Further reliance was placed on decision of Hon ble Supreme Court in case of Chuharmal v. CIT [1988] 172 ITR 250 to contend that section 110 of Evidence Act lays down salutary principle of common law jurisprudence that where person was found in possession of anything, onus to prove that he was not owner was on that person and it was held that this principle is equally applicable to taxation proceedings. If said principle is applied then it is clear that seized document found in possession of said Shri Sandeep Bansal belong to him and if it is claimed that these documents belong to assessee, onus of proof vest with department. Unless onus is discharged, assessee-company cannot be saddled with onus of explaining entries recorded therein. It was pleaded that such fabricated evidence prepared by disgruntled employee and found at his residential premises cannot be used against assessee unless independent corroborative evidence to support entries, is adduced by revenue. It was pleaded that not shred of evidence has been produced by revenue to establish that any such cash on account of under billing has found its way into coffers of assessee-company. It was pleaded that on contrary, investigation made by department and statement of various persons like Jhala Ram, Shanti Saxena etc. recorded by t h e department proved that no such cash amounts have been paid by purchasers and affidavit of said Shri Sandeep Bansal further demolishes false story to under-billing. 24. Reference was made to decision of Hon ble Supreme Court in case of Kishinchand Chellaram (supra) to contend that denial of opportunity to controvert evidence collected at back of assessee would disentitle Assessing Officer from using said evidence in taxation proceedings. In that case addition was deleted on ground that evidence was not confronted to assessee and there was no material on record to link amount transferred through telegraphic transfer by employee of Madras Branch to employee of Bombay Office. 25. Further reliance was placed on decision of Delhi High Court in case of CIT v. S.M. Aggarwal [2007] 293 ITR 43 to contend that seized documents have no probative value without examination of writer thereof. In that case statement given by assessee s daughter was held not relevant or admissible against assessee since no opportunity was provided to assessee t o cross-examine her and it was found that even from statement no conclusion could be drawn that entries made in seized document belong to assessee and represented his undisclosed income. Following observations were quoted: "It is well-settled that only person competent to give evidence on truthfulness of contents of document is writer thereof. So unless and until contents of document are proved against person, possession of document or handwriting of that person on such document by itself cannot prove contents of document." 26. It was pointed out that in that case seized documents were recovered from premises of assessee himself and even then it was held by Hon ble High Court that CIT(A) and Tribunal was right in deleting addition on ground that writer of document has not been subjected to examination. Reliance was also placed on following decisions to raise similar contentions: 1.Sir Mohammed Yusuf v. D. AIR 1968 Bom. 112. 2.Ramji Dayawala & Sons (P.) Ltd. v. Invest Import AIR 1981 SC 2085. 27. Further it was pleaded that sale transactions of S.S. Flats as reflected in books of account in assessee-company are duly supported b y entries as reflected in books of account of purchasers. purchasers have not paid any cash amounts on account of alleged under- billing. 28. It was pleaded that comparative sale rate chart of various types of stainless steel flat was filed before Assessing Officer vide letter dated 25-2- 2006 (page 113 of paper book). Copy of sale invoices of assessee- company as well as copies of sale invoices of other parties obtained by assessee were also submitted in support. It was pointed out that comparative chart of sale rates clearly indicated that rates charged by assessee was higher than rates charged by those parties. Thus, there was no scope for indulging in alleged mal-practice of charging any further cash amounts from purchasers. 29. It was further submitted that Assessing Officer has heavily relied on appraisal report prepared by DIT Investigation, Jaipur on Chopra Group of cases and it is observed by Assessing Officer that clinching evidence has been provided against assessee. It was submitted that no such material or evidence, allegedly collected by DIT Investigation during course of search operations carried out at Chopra Group, has been confronted to assessee and thus, reliance placed by Assessing Officer on appraisal report in Chopra Group is in total violation of principle of natural justice and on this ground alone impugned assessment as well as additions are liable to be treated as void ab initio and deserves to be cancelled. Concluding his arguments ld. AR submitted as under: (i)The department has inter alia carried out search operations at business premises of company at Jodhpur on strength of warrant of authorization issued in case of Shri Bansal. No incriminating evidence whatsoever has been found. books of account of assessee-company found and seized have been accepted as correct and true and there is no resort by Assessing Officer to provisions of section 145 of Act while making impugned assessments. No finding has been recorded by Assessing Officer for rejecting these books as unreliable. (ii)The total turnover of assessee-company has been in neighbourhood of Rs. 2,500 crores during years under reference and company has sales depots in various cities all over country namely Delhi, Mumbai, Chennai, Calcutta, Hyderabad, Ahmedabad and Jodhpur. While making impugned assessments for assessment years 2003-04 and 2004-05, Assessing Officer has accepted sales turnover as shown in books of company as correct except in Jodhpur branch for limited period 1-1- 2003 to 13-9-2003 treating Shri Bansal s books as gospel truth totally ignoring fact that same methodology of marketing its products is followed by company at various branches including Jodhpur and marketing strategies as well as policies and procedures for sale are controlled and monitored by its policy, planning and control department at head office. If company is not indulging in under-billing at any of its sale depots all over country, there is no earthly reason to imagine that company would resort to under-billing at newly opened branch at Jodhpur particularly when sale rates shown by assessee are admittedly higher than market rates of other manufacturers. No charge of under-billing has been made by Assessing Officer in preceding years or in succeeding assessment years. Even in respect of Jodhpur branch, sale of flats after 13-9-2003 on similar rates have been accepted as correct. entire approach of Assessing Officer is glaringly inconsistent, contradictory and illogical. (iii)Mere seizure of note-books or documents at personal residence of employee would not conclude issue against employer company that on money has been received by employer company. onus of proving charging of on money lies on department as held by Supreme Court in landmark judgment in case of K.P. Varghese v. ITO [1981] 131 ITR 597. onus has not been discharged by department in instant case. It has been held by Kerala High Court in CIT v. Smt. K.C. Agnes [2003] 262 ITR 354 that when document shows fixed price, there will be presumption that that is correct price agreed upon by parties. According to High Court, that is correct price agreed upon by parties. According to High Court, if sale deed shows lower sale consideration than consideration mentioned in agreement to sell and both documents are found during search, sale deed may be accepted as actual price for sale. In instant case of assessee, sale bills of transactions as well as ledger accounts and other books of account of assessee have been seized from office premises which indicate sale rates and consideration accruing or received by assessee and there is no admissible evidence that on money has been charged or received. (iv)The undisputed fact is that Shri Bansal is disgruntled employee of company and fabricated record for harming employer company. His affidavit dated 5-11-2003 brings out sinister motives and intention to blackmail company. In fact entire conduct and action of this employee during course of search at his house, as indicated here-in-before, vividly bring out despicable fact that he is king pin of entire conspiracy against company to harm its interest by fabricating record and then pass it on to department. (v)The patent falsehood of Shri Bansal s statement before authorized officer is eloquently evidenced by fact that despite magnitude of alleged under billing being of order of Rs. 14.4 crores, as claimed by him, no unaccounted cash, not even small amount, has been found or seized by authorized officer from Shri Bansal s residence or branch office. (vi)It is significant to mention here that false allegation regarding under- billing has been made by Shri Bansal in his statement at his house recorded at back of assessee and no such allegation has been made before search party at office premises of company even though panchnama prepared in case of Shri Bansal for search at office premises of company at Jodhpur makes mention that statement of Shri Bansal was recorded. (vii)The action of Assessing Officer in denying opportunity of cross- examining Shri Bansal, despite repeated request made by assessee- company, has vitiated legality of impugned assessments. In absence of opportunity of cross-examination, it is legally impermissible to rely on seized documents. binding decision of jurisdictional High Court i.e., Delhi High Court, in case of S.M. Aggarwal (supra) is direct authority on issue as discussed above. similar proposition which lays down law of land and hence is binding has been enunciated by Supreme Court in Ramji Dayawala & Sons (P.) Ltd. s case (supra) as mentioned above. (viii)There is no independent evidence, direct or circumstantial, to link seized documents of Shri Bansal with company. note-books and documents, fabricated by employee, are not in knowledge of employer. This record does not bear initials or endorsement of any senior management official of company. record has not been found at business premises of company. record does not belong to company. (ix)The statement of Shri Bansal dated 13-9-2003 recorded at time of search at his residence has been retracted by him by swearing affidavit dated 25-11-2003 wherein he has admitted that records had been fabricated by him for ulterior motives. (x)The Department has recorded statements of Shri Jhalaram and Shri Shanti Saxena who have categorically denied charging of on money or receipt of any such cash amounts from Shri Bansal. Statements of Shri Vikram Jindal, Shri Rattan Jindal, Director and Shri Bikram Kumar Senior Vice President of company have also been recorded by department which clearly falsifies earlier statement of Shri Bansal regarding over-billing. These statements provide irrefutable evidence regarding fabrication of records by Shri Bansal. Assessing Officer has unfortunately ignored this direct evidence which support case of assessee-company. Obviously Assessing Officer found this evidence much too inconvenient to consider and refute it. studied silence of Assessing Officer regarding this crucial evidence collected b y department itself supports assessee. misplaced zeal of Assessing Officer in adopting earlier statement of Shri Bansal dated 13-9- 2003 as main stay of department s case ignoring mass of evidence supporting truthfulness of assessee s accounts cannot but be deprecated as illegal, vitiated and void. 30. Thus, it was pleaded by ld. AR that having regard to aforementioned facts and circumstances of case and keeping in view totality of facts and evidences on record, assessments made by Assessing Officer may be cancelled as void and illegal. On merits it was prayed that impugned additions being invalid and unsustainable in law should be deleted. 31. On other hand, ld. DR pleaded that in present case search and seizure was conducted in premises under control of Shri Sandeep Bansal who is employee (Branch Manager) of assessee-company. There is no dispute with regard to employment of Shri Sandeep Bansal with assessee-company. documents/papers seized clearly established fact of under-billing of sales made from time to time leading to escapement of income and thus, escaped income under such conditions could be added in hands of assessee since Shri Sandeep Bansal has never carried out business of manufacturer and sale of Stainless Steel/Slabs, Flats, Coils Bladed Steel, Black Coin etc. 32. It was pleaded that it is technical plea of assessee that provisions of section 153A could not be invoked and same is not correct. assessments have been made after validly initiated search and seizure operation in case of employee of assessee-company and not of any third person unrelated to assessee-company. whole exercise of search and seizure action is aimed at exposing of clandestine activities of earning income etc., outside books of account by resorting to under-billing as discussed by Assessing Officer and approved by first appellate authority. Ld. DR pleaded that there is no bar either to make assessment under section 153A or 153C as long as there is seized material indicating concealment of income by assessee. He pleaded that as soon as provisions of section 153A or 153C are pressed into action, any regular assessment pending as on that date gets abated. If assessments made in this case are held to be illegal, there is no provision to bring back life to abated regular assessment proceedings. whole claim of assessment after search and seizure is to be appreciated against this back drop. Even if there is technical error it cannot vitiate assessments made in light of provisions of section 292B. Reference was made to decision of Hon ble Kerala High Court in case of T.A. Abdul Khader v. CWT [2008] 296 ITR 20 in which it has been held that mistaken or defective actions or omissions should not invalidate proceedings initiated or completed which are in substantial compliance with statutory scheme. Thus, ld. DR pleaded that in order to uphold defective proceeding, what has to be considered is whether action taken is in substance and is in conformity with intent and purposes of Act. 33. Further reference was made to decision of Hon ble Supreme Court i n case of Collector, Land Acquisition v. Mst. Katiji [1987] 167 ITR 471 in which it has been observed by Hon ble Supreme Court that when substantial justice and technical consideration are pitted against each other, cause of substantial justice deserves to be preferred. 34. Further reference was made to decision of Allahabad High Court in case of Atul Traders v. ITO [2006] 282 ITR 536 to contend that wherein it has been held that object of giving notice is to inform person concerned with matter and if person receives information/notice by any source and thus, had opportunity of defending him, then mere fact that notice as per statutory provision, or in particular mode prescribed under law, has not been given, will not vitiate action/decision for reason that purpose of giving notice was achieved and no prejudices caused to concerned on this score. Referring to this decision it was pleaded by ld. DR that assessee-company was put on sufficient notice by Assessing Officer with regard to his intention to tax assessee-company on unaccounted income earned by it in terms of under-billing thus, on technical grounds such addition could not be deleted. 35. It was further pleaded that collection of taxes should not be bogged down on account of technical considerations. Being enactment aimed at collecting revenue, Legislature did not intend collecting revenue to be bogged down on account of technical plea of jurisdiction reference was made to decision of Allahabad High Court in case of Hindustan Transport Co. v. IAC [1991] 189 ITR 326. 36. It was pleaded that department cannot be made worst of by conducting search and seizure operations as additions which could have been made in regular assessments stand un-addressed, moment assessments made under section 153A are held to be null and void on technical grounds and for venial breach of law. Assessing Officer has rightly acquired jurisdiction over assessee to tax unaccounted income after search and seizure operations were conducted in one business premises of assessee which were under control of Shri Sandeep Bansal who categorically stated that there was under-billing and he collected cash which were ultimately passed on to assessee-company. Thus, it was pleaded by ld. DR that for above reasons grounds challenging validity of assessment should be rejected. 37. Coming to merits of addition ld. DR pleaded that evidence collected by department from residence of said Shri Sandeep Bansal has clearly established collection of money outside books of account by way of under-billing and such evidence could not be ignored. For this purpose reliance was placed on this decision in case of Mange Ram Mittal v. Asstt. CIT [2007] 289 ITR 112 (Delhi) (AT). Ld. DR pleaded that theory of fabrication of evidence by disgruntled employee cannot be believed since no police complaint has been lodged against that employee. 38. On issue of cross-examination, ld. DR pleaded that affidavit given by said Shri Sandeep Bansal is self-serving evidence which is afterthought. It was pleaded that it cannot be relied on. Reference was made to decision of Hon ble Supreme Court in case of CIT v. Durga Prasad More [1971] 82 ITR 540 to contend that it was neither rule of prudence nor rule of law that statement made in affidavit which remains uncontroverted must invariably be accepted as true and reliable. It was pleaded that it is also duty of assessee-company to explain its case and also produced Shri Sandeep Bansal f o r cross-examination and what prevented assessee from producing him before Assessing Officer when assessee could get affidavit from him. 39. On issue of principle of natural justice ld. DR pleaded that assessee-company was supplied with copies of seized documents as mentioned in para 9 on page 10 of assessment order for assessment year 2003-04 and assessee-company did not choose to reply as mentioned in para 11 of same assessment order. He pleaded that except for reiterating issue of cross examination of said Shri Sandeep Bansal, no further evidence was led before CIT(A) to controvert findings arrived at by Assessing Officer. 40. It was pleaded that ld. AR heavily relied on observance of principle of natural justice for which there cannot be two opinions and lower authorities have given sufficient and reasonable opportunity to assessee to defend its case, therefore, grounds of reasonable and sufficient opportunity should also be dismissed. 41. Ld. DR further pleaded that it has been contention of ld. AR that other office of assessee-company were not subjected to search and seizure operation. Ld. DR pleaded that no assessee can dictate to department as to which place is to be searched as it depends on various factors and circumstances of case and information available with department. 42. Reference was made to decision of Bombay High Court in case o f Gordhandas Hargovandas v. CIT [1980] 126 ITR 560 in which it has been held that though in isolation each piece of evidence may appear to be of little weight, on over all appreciation it would be permissible to consider their cumulative effect and decide one way or other. 43. Concluding his argument he pleaded that in view of findings given in t h e assessment order and discussion made by CIT(A) in his order and submissions made by him appeal of assessee for both years may be dismissed. 44. We have carefully considered rival submissions in light of material placed before us. assessments in present case have been made under section 153A of Act. Section 153A provides that in case person against whom search is initiated under section 132A of Act then notwithstanding anything contained in sections 139, 147 148, 149, 151 and 153 of Income-tax Act, Assessing Officer shall issue notice to such person requiring him to furnish returns of income in respect of six assessment years preceding assessment year relevant to previous year in which search was conducted or requisition made. Thus, prerequisite of section 153A is that assessment under this section can be made only in case of person where search is initiated under section 132 or books of account or other documents or any assets are requisitioned under section 132A after 31-5-2003. As present case is not case of requisition as described in section 132A, therefore, prerequisite condition for application of section 153A is that assessment under this section can be made against person in case of whom search is initiated under section 132 of Act. It is case of assessee that no search has been initiated in its case therefore, resort to section 153A was in violation of law. To examine such contention it has to be seen that whether any search has been initiated in case of assessee. Copy of two panchnamas on basis of which search was conducted in case of Shri Sandeep Bansal t his residential premises as well as Jodhpur Branch Office of assessee, where person searched was employee, are placed at pages 1-6 and 7-17 of paper book filed by assessee. In both of panchnamas in column the name of Shri Sandeep Bansal has been written which clearly shows that search warrant was in case of Shri Sandeep Bansal and not in name of assessee. For sake of convenience inscription in panchnama regarding column is reproduced below: Panchnama prepared at residential premises of said Shri Sandeep Bansal Panchnama (To be prepared in triplicate) (A) Warrant in : Shri case of Sandeep Bansal (B) Warrant to : A-38, search Shastri Nagar, (Details & : Jodhpur Ownership of place of search) Telephone : 5107532 Numbers Panchnama prepared at Branch Office of assessee Panchnama (To be prepared in triplicate) (A) Warrant in : Shri case of Sandeep Bansal (B) Warrant to : M/s. Jindal search Strips Ltd., Now (Details & : M/s. Jindal Ownership Stainless Ltd. of place of C-62, MIA, search) IInd Phase. Baini Jodhpur Telephone : 2740228 Numbers 45. Though above panchnama clearly shows that warrant was not in name of assessee-company but were in name of Shri Sandeep Bansal but ld. DR wanted time to produce such warrant to support his arguments that warrant is in name of Branch Office of assessee. This case was argued by both parties on 25-2-2008 and after completing argument ld. DR sought one month time to produce copy of search warrants. Similar time was earlier sought by ld. DR. However, keeping in view interest of justice further time was given to ld. DR and appeals were adjourned to 17-3-2008 when ld. DR produced copies of search warrants, relevant portion of which has already been reproduced in above part of this order. There also search warrants are in name of Shri Sandeep Bansal only and are not in name of assessee-company. Thus, prerequisite condition of search being initiated in case of assessee is not fulfilled. However, here it may be contention of revenue that place where search is conducted is place possessed by assessee-company and whether assessment is made under section 153A or under section 153C it is only technical issue for which assessment cannot be held invalid. We find no force in such contention as if assessment is made under section 153C then also there is procedure prescribed under that section which is required to be followed by revenue. In that case Assessing Officer of person on whom search is conducted has to satisfy himself that valuable article or books of account or documents seized during course of search belongs to person other than person on whom search is made then that Assessing Officer shall hand over such valuable article or books of account to Assessing Officer who has jurisdiction over such other person and notice will be issued accordingly under section 153C of Act. There is no material on record to suggest, that any exercise which has been mentioned in provisions of section 153C has been adopted. There is no force in argument of ld. DR that such argument of assessee is only technical, therefore assessment framed on assessee without following procedure laid down in section 153C cannot be held to be invalid. There may be valid search in case of said Shri Sandeep Bansal but assessment under section 153A could be made only in his hands and not in case of assessee unless procedure laid down in section 153C is followed. Such defect in framing assessment is jurisdictional defect which cannot be cured and assessment has to be held to be invalid because Assessing Officer did not have any jurisdiction to assess assessee without adopting procedure laid down in section 153C as search was neither initiated nor conducted in case of assessee. There was no warrant of authorization to conduct search on assessee and no search was initiated or conducted in case of assessee. 46. To further explain that assessments framed in hands of assessee-company under section 153A are not valid, it is observed that provisions of section 153C(1) are almost similar to provisions of section 158BD which is applicable to searches conducted up to day of 31-5-2003. Provisions of section 158BD and 153C(1) are reproduced below: "158BD. Undisclosed income of any other person - Where Assessing Officer is satisfied that any undisclosed income belongs to any person, other than person with respect to whom search was made under section 132 or whose books of account or other documents or any assets were requisitioned under section 132A, then, books of account, other documents or assets seized or requisitioned shall be handed over to Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed under section 158BC against such other person and provisions of this Chapter shall apply accordingly. 153C. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to person other than person referred to in section 153A, then books of account or documents or assets seized or requisitioned shall be handed over to Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with provisions of section 153A: Provided that in case of such other person, reference to date of initiation of search under section 132 or making of requisition under section 132A in second proviso to section 153A shall be construed as reference to date of receiving books of account or documents or assets seized or requisitioned by Assessing Officer having jurisdiction over such other person." 47. While interpreting section 158BD, Hon ble Supreme Court in case o f Manish Maheshwari v. Asstt. CIT [2007] 289 ITR 341 have observed as under: "Condition precedent for invoking block assessment is that search has been conducted under section 132, or documents or assets have been requisitioned under section 132A. said provision would apply in case of any person in respect of whom search has been carried out under section 132 or documents or assets have been requisitioned under section 132A. Section 158BD, however, provides for taking recourse to block assessment in terms of section 158BC in respect of any other person, conditions precedent where for are: (i) satisfaction must be recorded by Assessing Officer that any undisclosed income belongs to any person, other than person with respect to whom search was made under section 132 of Act; (ii) books of account or other documents or assets seized or requisitioned had been handed over to Assessing Officer having jurisdiction over such other person; and (iii) Assessing Officer has proceeded under section 158BC against such other person. conditions precedent for invoking provisions of section 158BD, thus, are required to be satisfied before provisions of said Chapter are applied in relation to any person other than person whose premises had been searched or whose documents and other assets had been requisitioned under section 132A of Act." [Emphasis supplied] 48. It is further observed as under: "The provisions contained in Chapter XIV-B are drastic in nature. It has draconian consequences. Such proceeding can be initiated, it would bear repetition to state, only if raid is conducted. When provisions are attracted, legal presumptions are raised against assessee. burden shifts on assessee. Audited accounts for period of ten years may have to be reopened." [Emphasis supplied] 49. From above observations of their lordships of Hon ble Supreme Court, it is clear that before provisions of section 158BD/153C are sought to be applied then conditions laid down in these sections are required to be satisfied. It has further been observed that provisions contained in Chapter XIV- B are drastic in nature and these have draconian consequences and such proceedings can be initiated only if search is conducted because when these provisions are attracted legal presumptions are raised against assessee and burden also shifts on assessee. In view of these observations, it will be incorrect to say that non-fulfilment of conditions precedent for invoking provisions of section 153C is merely technical defect which can be cured. Reference here also can be made to decision of Hon ble Calcutta High Court in case of Sunrolling Mills (P.) Ltd. v. ITO [1986] 160 ITR 412 wherein Assessing Officer had proceeded on basis of section 147(b) and Assessing Officer sought to justify proceedings at time of reassessment as if they were taken under section 147(a). There is difference between these two sections as under section 147(b) requirement is that information should come to Assessing Officer subsequent to making of original assessment. Whereas section 147(a) requires that escapement of income has occurred by reason of omission or failure on part of assessee to disclose fully and truly all material facts necessary for his assessment. It was observed by their lordships as under: "In this case, ITO has sought to justify his action by taking recourse to section 292B. This section is intended to ensure that on technical grounds return of income, assessment, notice or summons or proceedings is not rendered invalid. This section does not empower ITO to treat proceeding taken under section 147(b) as proceeding under section 147(a). This is not mere technicality. It is question of jurisdiction. Unless conditions precedent are fulfilled, no proceedings whether under clause (a) or (b ) of section 147 can be initiated." 50. Reference also can be made to decision of Hon ble Allahabad High Court in case of CIT v. Shital Prasad Kharag Prasad [2006] 280 ITR 541 wherein notice under section 148 was not served on all adult members HUF after partition. Notice was served on B having authority on behalf of Karta J. It was observed that after death of J service was invalid as authority had lapsed on death of J and such invalidity could not be cured by invoking section 292B. Their lordships observed as under: "In view of above, Tribunal has rightly held that section 292B of Act will have no application to facts of present case. said section condones invalidity which arise merely by reason of any mistake, defect or omission in notice, if in substance and effect, it is in conformity with or according to intent and purpose of Act. notice in question was not served on all adult members of family, as required under section 283(1) of Act. This mistake goes to very root of matter. It is fairly settled that assessing authority gets jurisdiction to reopen concluded assessment only after serving valid notice on assessee. notice contemplated under section 148 of Act is jurisdictional notice and is not curable under section 292B of Act, if it was not served in accordance with provisions of Act." 51. In view of above discussion, argument of ld. DR that in view of section 292B, assessments of assessee could not be held invalid, does not hold good and has to be rejected. 52. Now coming to case law relied upon by ld. DR in case of T.A. Abdul Khader (supra) validity of assessment was challenged on ground that notice issued under section 18(2) was invalid on ground that section under which return was filed namely that 14(1), 14(2) or section 17 was not made clear as none of three sections were struck off in notice. It was held that same did not affect validity of notice under section 18(2) as assessee had understood notice and also complied same by giving explanation for delay in filing return. It was also admitted by assessee that he did not file return under section 14(1) but he filed belated return and thus, it was held that section 42C attracted and notice was valid. In that case there was some mistake in issue of notice as irrelevant sections were not struck off and assessee had complied with notices. Therefore, it was held that it was mere mistake covered by provisions of section 42C of Wealth-tax Act (similar to section 292B of Income-tax Act). It may be mentioned here that assessee in present case right from beginning had put protest to Assessing Officer to contend that no search operation has been conducted under section 132(1) of Act in case of assessee, therefore provisions of section 153A are not applicable and this protest was placed on record vide letter dated 17-2- 2005 copy of which is placed at pages 28-29 of paper book and thus, it cannot be said that assessee had submitted to jurisdiction of Assessing cannot be said that assessee had submitted to jurisdiction of Assessing Officer for framing assessment under section 153A. Subsequently also such protest were made by letters dated 22-12-2005, 15-2-2006 and 18-2-2006 copies of which are placed at pages 93-96, 99-102 and 106-109 respectively. Therefore, no support can be drawn by revenue from decision in case of T.A. Abdul Khader (supra). 53. In case of Mst. Katiji (supra) it was held by Hon ble SC that term "sufficient cause" for purpose of condonation of delay should be interpreted with view to do even handed justice on merits in preference to approach which scuttles decision on merits. And power to condone of delay is conferred with view to enable courts to do substantial justice to litigants by disposing off cases on merits. This decision has been relied upon by ld. AR to contend that substantial justice deserves to be preferred ignoring technical aspect of issue. In present case no issue is involved regarding condonation of delay. So as it relates to contention that it is merely technical defect, it has already been observed that framing of assessment under section 153A cannot be said to be technical defect as no search has been conducted in case of assessee. Thus, no support can be derived by revenue from said decision. 54. In case of Hindustan Transport Co. (supra) writ petition was filed by assessee against assessment on ground that officer lacked jurisdiction to make assessment. It was contended that CBDT vide its order dated 31-12-1987 passed under section 127 of Act had transferred assessee s case to E-Ward, Lucknow Circle, Lucknow and said order will take effect from 20-1-1988. It was contended that in view of said transfer order, Assessing Officer who has framed assessment seized to have jurisdiction to deal with assessment with effect from 20-1-1988 and thus, order of assessment passed on 30-3-1988 is without jurisdiction. Their lordships had examined provisions of section 124 and found that assessee s case was covered by clause (a) of sub-section (5) of section 124. It was observed that Act does not prescribe respective jurisdiction or functions of various Income- tax Authorities and various Income-tax Authorities are of co-ordinate jurisdiction and it was observed that such defect arising from allocation of functions is mere irregularity which does not effect resultant action. In our considered opinion no support can be drawn by revenue from said decision to uphold validity of assessment framed under section 153A as in present case non-fulfilment of conditions laid down in sections 153A and 153C is neither procedural defect nor administrative defect but it relates to jurisdictional defect. 55. In view of above discussion it is held that assessments framed in present case under section 153A are invalid and are quashed. 56. Though it has been held by us that assessment framed are invalid but for sake of completeness we also decide other issues raised in these appeals. 57. assessment, as contended by ld. AR is also bad on account of non-observance of principles of natural justice. Vide letter dated 22-12-2005 submitted to Assessing Officer it was mentioned in para 10 that Assessing Officer is drawing adverse inference from statement of Shri Sandeep Bansal which was recorded during search proceedings carried in his case, therefore, he be produced for cross-examination as assessee-company vehemently dispute allegation of any under-billing on its part and it was claimed that said statement is totally false and is incorrect. It was further submitted in para 11 that assessee-company shall be highly grateful if assessee is confronted with any such material on basis of which it may be stated that search was initiated against assessee and if such material is supplied, assessee shall comply with notice issued with respect to its assessment. 58. Vide letter dated 15-2-2006 again vide para (e) it was submitted that statement of said Shri Sandeep Bansal was recorded behind back of assessee and no opportunity was ever allowed to assessee to cross- examine said Shri Sandeep Bansal. It was pointed out that assessee has obtained affidavit from said Shri Sandeep Bansal which is dated 5-11-2003. same was submitted by assessee to Assessing Officer. In affidavit said Shri Sandeep Bansal had admitted that he had been planning to use fabricated records against assessee-company. It was also submitted that in view of affidavit filed by said Shri Sandeep Bansal no adverse inference should be drawn against assessee by taking recourse to statement recorded at back of assessee and in alternative it was submitted that Shri Sandeep Bansal may be produced for cross-examination in order to enable assessee to rebut purported statement which was admittedly made by him to cause financial loss to assessee-company on basis of fabricated material. Copy of affidavit has been filed at pages 103-104 of paper book. In said affidavit it has been stated by said Shri Sandeep Bansal that he was promised for higher emoluments after sometimes after he was transferred to Jodhpur in month of January, 2003 but despite promise made, no substantial increase was given despite his repeated request to management for higher salary. It has further been mentioned that statement given at time of search was totally untrue and incorrect and was made in scheme of things planned by him to cause financial loss and damaged to aforesaid company. He has also stated that he had in scheme of things prepared certain papers including floppies on which he noted certain assumed figures on basis of which he could allege that company had received money by under invoicing sale bills and also he intended to hand over said fabricated record to any Government Authority with intention to cause damage to company if his request for increment in salary and for other benefits would not have been favourably accepted. 59. In view of above mentioned repeated requests Assessing Officer was under legal obligation to provide assessee with effective opportunity t o cross-examine said Sh. Sandeep Bansal for keeping observance to principles of natural justice. Mere sending summons to said Sh. Sandeep Bansal for which adjournment sought cannot be said to be effective opportunity. It is not case of revenue that where about of said Shri Sandeep Bansal were unknown to department as when summons were issued to him he sought adjournment for week from department and this fact is recorded in assessment order itself. summon issued to said Shri Sandeep Bansal was for appearance on 21-2-2006 on which he sought adjournment for week on ground that he was not feeling well. assessment has been framed on 17-3-2006. Thus, there was ample time available with Assessing Officer to grant effective opportunity to assessee for cross-examination of said Shri Sandeep Bansal. His request was rejected on ground that no medical certificate was enclosed. Assessing Officer drawn conclusion on basis of presumptions that Shri Sandeep Bansal did not want to appear before him and without verifying or without making further effort, Assessing Officer rejected affidavit on ground of its being afterthought. This approach of Assessing Officer is clearly in violation of principle of natural justice. For arriving at conclusion that affidavit of said Shri Sandeep Bansal is afterthought, Assessing Officer has relied on statement given by him during course of search. According to Assessing Officer, said statement had evidentiary value as same was given voluntarily. No doubt statement given during course of search has evidentiary value but such evidentiary is attached to person who has been search. Even in case of person who has been searched statement given by him can be rebutted by producing evidence that such statement is contrary to existing facts. But for framing assessment in case of third party (the assessee) statement could not be relied upon by Assessing Officer, particularly in circumstances when request has been made for cross-examination of deposer. In present case, as already mentioned, assessee had obtained affidavit from deposer during course of in-house enquiry and same was submitted to Assessing Officer. Therefore, it was requirement of law to provide assessee with opportunity to cross-examine him, if same is demanded. If such opportunity is not provided than additions cannot be made in case of third party (the assessee) by relying on said statement. Assessing Officer further has placed reliance on documents which have been seized from residence of said Shri Sandeep Bansal. Here also no further verification has done by Assessing Officer to find out authenticity of those documents as according to department full statement of affairs was recorded therein. If full particulars were available with department than it was not difficult for Assessing Officer to establish that assessee in fact had received extra consideration by over- billing. No such exercise has been done by Assessing Officer but reliance has been placed only on statement of said Sh. Sandeep Bansal. In other words, addition cannot be held justified on basis of documents found from residential premises of said Sh. Sandeep Bansal unless positive material is brought on record by revenue that assessee in fact had received any extra money on account of over-billing. There is complete absence of such material. 60. reliance by Ld. DR on decision in case of Atul Traders (supra) is also misplaced as in said case it was observed by their Lordships that assessee was given opportunity of hearing. It was further observed that object of giving notice was to inform person concerned with matter and if that person receives information/notice by any source and had opportunity of defending him, then, mere fact that notice as per statutory provisions, or in particular mode prescribed under law, has not been given, will not vitiate action/decision for reason that purpose of giving notice was achieved and no prejudice is caused to concerned on this score. But facts in present case are totally different. In present case, assessee has been demanding cross-examination of person on basis of whose statement addition has been made. said opportunity for cross-examination has not been given to assessee on pretext that affidavit of Shri Sandeep Bansal was afterthought. It is mandate of law that statement which is being relied against person, that person should be given opportunity of cross examination and unless such opportunity is given, addition cannot be held to be valid solely on ground that there was violation of principle of natural justice as opportunity of cross-examination was not given to assessee and such mandate of law is clear from aforementioned decision of Hon ble jurisdictional High Court in case of SMC Share Brokers Ltd. (supra). 61. Moreover documents recovered from residential premises of said Shri Sandeep Bansal can by no stretch of imagination be related to assessee for framing assessment under section 153A without resorting to section 153C. Thus, documents recovered from residential premises of said Shri Sandeep Bansal cannot be basis for making addition in assessment framed in case of assessee under section 153A without observing process as prescribed in section 153C of Act. 62. It has been contention of ld. DR that evidence gathered during course of search clearly establish collection of money, outside books of account maintained by way of under-billing and for such contention reliance was placed by him on decision of Special Bench in case of Mange Ram Mittal (supra). Such contention of ld. DR is incorrect as evidence gathered from residence of Shri Sandeep Bansal does not in any way establish collection of money outside books of account as for holding so, Department has relied only on statement given by Shri Sandeep Bansal and there is no independent material/evidence to establish such collection of money. It has already been pointed out that it is not case of Department that such evidence/material could not be collected due to lack of any information. Rather all particulars were available with department from where correct facts could be determined. Despite availability of all such material nothing has been brought on record by revenue to establish that any amount was received by assessee on account of under-billing of sale invoices. Thus there is complete absence of any material or evidence on record to justify addition. Therefore, addition, which is solely based on statement of Sh. Sandeep Bansal, cannot be upheld. 63. Reliance is placed by Ld. DR on decision of Hon ble Supreme Court in case of Durga Prasad More (supra) for contending that affidavit given by Shri Sandeep Bansal is self-serving evidence and is also afterthought and same could not be relied upon. In said case it is held that it was neither rule of prudence nor rule of law that statement made in affidavit which remains uncontroverted must invariably be accepted as true and reliable. facts in present case are totally different. Neither statement of said Shri Sandeep Bansal has undergone test nor affidavit submitted by him has undergone test. Therefore, nothing conclusive can be inferred either from statement or from affidavit. question in present case is that whether there is any evidence which has been put to test to establish that there was any collection by assessee on account of under-billing in respect of sales made by it. There is no such evidence, therefore, decision in case of Durga Prasad More (supra) has no relevance for deciding present case. 64. decision of Hon ble Bombay High Court in case of Gordhandas Hargovandas (supra) was relied upon by ld. DR to contend that each piece of evidence though may appear to be of little weight, but taking overall evidence though may appear to be of little weight, but taking overall appreciation it will be permissible to consider their cumulative effect for deciding matter one way or other. Such contention of ld. DR has no relevance for deciding present case as so-called evidence on basis of which addition has been made by revenue is not supported by any material or evidence and it has not been put to test also. 65. Assessing Officer has also pointed out that record recovered f r o m residential premises of said Shri Sandeep Bansal in respect of expenditure were in complete agreement with regular books of account. In our opinion same has no relevance to draw conclusion that in respect of over-billing also record seized will be correct as said conclusion will be based on mere presumption without verifying truth thereof. Further so as it relates to perfection of account regarding collection and payment of extra amount, it has already been pointed out that no independent evidence has been brought on record to show authenticity of such record as if said account was so perfect then matter could have been inquired from parties who had paid such extra amount. 66. So as it relates to allegation of Assessing Officer regarding payments received on account of over-billing from Chopra Group of cases, no material has been brought on record by revenue that in fact any extra amount was received by assessee from Chopra Group. It has already been pointed out that it was matter of investigation and enquiry on basis of which alone such addition could have been made. 67. Keeping in view above facts, it is clear that addition has been made in violation of principle of natural justice as no opportunity was afforded by Assessing Officer to assessee for cross-examination of said Shri Sandeep Bansal despite repeated requests made in this regard. Therefore, addition is liable to be deleted. To support such conclusion reliance can be placed on decision in case of Kalra Glue Factory (supra) in said case appeal of assessee was allowed solely on ground that statement of Bankelal which was not tested by cross-examination was used in order to reach conclusion that transaction was inter-State sale. 68. In case of Kishinchand Chellaram (supra), employee of said company had made telegraphic transfer of sum of Rs. 1,07,350 to N who was also employee of that assessee in Bombay Office. On enquiries made by Assessing Officer from Madras Bank, Manager of Bank informed Assessing Officer that telegraphic transfer of Rs. 1,07,350 send by assessee from Madras was received by bank at Bombay and amount was paid to N. Assessing Officer treated said amount as income of assessee from undisclosed sources. It was held by Hon ble Supreme Court that such addition was not justified. burden of proof was on revenue to prove that amount belonged to assessee. Letters of Bank Manager, in absence of same being supplied to assessee, could not be used against assessee as Manager was also not examined by department and there was no positive evidence for conclusion that such amount belonged to assessee. 69. In case of SMC Share Brokers (supra), Hon ble Delhi High Court has held that in absence of Third Party being made available for cross examination despite repeated request by assessee, his statement could not be relied upon to detriment of assessee and Tribunal was held justified in setting aside block assessment. In said case statement of Shri Manoj Aggarwal was recorded by department and on basis of that statement addition was made in case of assessee in block assessment proceedings. Said Shri Manoj Aggarwal was Third Party. assessee made repeated requests for cross-examine of said Shri Manoj Aggarwal. It was observed by Delhi High Court that though there is no doubt that statement of Manoj Aggarwal had evidentiary value but weight could not be given to it in proceedings against assessee without it being tested under cross examination. It was further observed that in absence of statement being tested, it cannot be said that it should be believed completely to prejudice of assessee. Thus, assessment was held to be rightly set aside by Tribunal. 70. above case law supports conclusion that assessee being not given opportunity for cross-examination, additions made cannot be held to be rightly made and are liable to be deleted. 71. Coming to merits of addition, it was pointed out by ld. AR that there was no on money received by assessee- company on account of sale o f S.S. Flats. Reference in this regard was made to letter filed before Assessing Officer which is dated 25-2-2006 copy of which is placed at pages 111-112 of paper book. Vide this letter assessee had submitted comparative chart showing sale price of S.S. Flats by assessee-company during period January, 2003 to October, 2003. Vis-a-vis selling price of S.S. Flats by other competitors in open market. Not only comparative chart was furnished but copies of sale invoices of assessee-company as well as copies of sales invoices of other parties were furnished to support contention that prices of assessee-company are duly comparable with selling prices of other manufacturers. chart is placed at page 113 of paper book and invoices are furnished at pages 114-234 of paper book. Before CIT(A) also such submissions were made and comparable rates were furnished vide letter dated 31-8-2006. Assessing Officer has not made any comment on such submission of assessee. However, CIT(A) has rejected such contention of assessee with following observations: "As far as comparability of accounted for rates with other parties is concerned, same is not acceptable because in present case quality may b e better and popularity of brand may be. Moreover, rate chart is not supported with prevailing price evidence of appellant and other suppliers. In any case department has found emphatic evidence of cash collection over and above bill amount." 72. Assessing Officer did not comment on such submission of assessee. If there is allegation of having received extra consideration, and it is denied by assessee by producing sufficient evidence to contend that such allegation of having received extra consideration is not supported by surrounding facts, said evidence cannot be rejected on face of it without making verification in this regard. evidence submitted by assessee was documentary evidence containing all necessary particulars which included name of seller, name of buyer, type of commodity, its quantity and rate. parties between whom these transactions were made were also identifiable from where relevant enquiries could be made. Such evidence could not be rejected merely on ground that statement of said Shri Sandeep Bansal has more merely on ground that statement of said Shri Sandeep Bansal has more evidentiary value than evidence produced by assessee. It has already been pointed out that said statement did not have any evidentiary value unless same is put to test of cross examination. Ld. CIT(A) also could not find any defect in submissions of assessee that rate charged by it was comparable with rates charged for similar goods by other manufacturers. Though it has been observed by CIT(A) that assessee s quality may be better but he has not brought any evidence on record to substantiate that in fact quality of assessee could fetch extra price in market. Thus, on merits also addition made by Assessing Officer cannot be sustained and is deleted. 73. To sum up our conclusions are: (i)that assessments framed on assessee under section 153A are invalid assessments as discussed in body of this order. (ii)the additions made in assessments on account of under-billing are deleted on account of non-observance of principles of natural justice as well as on account of merits as discussed in body of this order. 74. Ground No. 16 for assessment year 2003-04 is for disallowance of sum of Rs. 69,438 on account of unpaid CST. Though we have held that assessments are invalid but for sake of completeness, we proceed to decide this ground. Assessing Officer disallowed this amount as same was not paid during year. Before CIT(A) it was pleaded that payment was made before due date of filing return. However, Ld. CIT(A) has upheld disallowance on ground that no proof of payment was furnished with return of income. After hearing both parties on this issue we restore this issue to file of Assessing Officer with direction to verify payment. If payment is made before due date of filing Income-tax return than same will be allowed. We direct accordingly. This ground is allowed for statistical purposes. In result appeals filed by assessee are allowed. *** JINDAL STAINLESS LTD. v. ASSISTANT COMMISSIONER OF INCOME TAX